PAYING TOO MUCH FOR MONTHLY CALLING CHARGES?
PBXL’s Total Telephony Solution is the answer for unlimited
domestic and international calling. With PBXL cloud
telephony and TTS, enjoy a fully managed solution with zero
variable costs. No office is too big or too small to save
money.

- Unlimited calling within Japan and 23 countries
- Flat-rate calling charges based on number of phones
- PBXL will review your current bills and save you money

Over the last few months there are have been numerous
announcements of the formation of funds and incubation
facilities for Japanese start-ups. We see this as a welcome
first "breeze of spring" after a tough ten years or so in
the start-up space. Japan has always been short of real
venture capital and know-how to start new companies, and
the post dot-com period was tougher than usual.

One of the common elements of the new funds and
incubators/accelerators that go with them is that they are
investing micro amounts, rather than the 1-5 oku yen
(US$1.2m-US$6m) that has been traditional for VCs. This is
a riff off the Y Combinator business model started in the
USA back in 2005. For those who don't know, Y Combinator
became a minor legend in the VC sector for its practice of
investing around US$20,000 in up to 60 companies per
"season", inviting those companies to set up in its
incubator/accelerator facility for 3 months, where
Y Combinator's staff would work with each company to prep
them for "Demo Day", a one day pitch opportunity to
potential investors.

Those companies that get their funding are considered
graduates, with Y Combinator coming along for the ride as
an early investor, while those who don't get funding will
go back to their garages and think of something else to do.
Y Combinator is particularly impressive not only for the
small amount of cash it uses to get into investee
companies, but also in the number of companies it sees --
hundreds a year.

We don't see a Y Combinator comparison here in Japan yet,
but there is no doubt that the idea of funding lots of
companies with small amounts of cash and copious amounts
of know-how is very attractive and well suited to the
Japanese penchant for reducing risk. One could argue that
small amounts of cash means small results, and certainly
the model is only effective in situations where a company
can produce its business in a small cubicle, with a few
people, in a short space of time. It doesn't work for
biotech companies for example. The fact, too, is that
Y Combinator is less of an incubator that turns out
companies with products and services and more of an
accelerator whose job is to prep companies for the next
phase.

What we see here in Japan is that small-cash
investor/incubators like to host companies for longer
periods, often for a year or more, and like to have a
strong hands-on involvement with the education of their
investees. In this respect there is a tacit acknowledgement
that most Japanese start-ups are immature in matters of
business and personnel development, and do need an
experienced hand to survive. What's interesting is that not
only the operators of the incubators think this way, the
entrepreneurs themselves do too. Maybe it's a
educational/cultural thing, but most of the entrepreneurs
we see coming through these incubators/accelerators act
more like university students on campus than business
people. Not a bad thing -- just interesting.

[Continued below...]

-- NAGAMINE & MISHIMA - Securing Your Success in Japan ---

Starting a new company in Japan? Looking to streamline
your current operations?

The team of bilingual experts at Nagamine & Mishima is able
to provide high quality accounting, payroll and tax
services that both exceed expectations and fit your budget.
Our services help customers improve their operations and
bottom line results.

Amongst recent "micro-funds" with an incubator function to
be announced have been the following:

Movida Japan
Founded by Taizo Son, brother of Softbank's Masayoshi Son,
this fund focuses on web companies, particular those in
games and social networks. Movida says it will invest in
over 250 firms in the Asia-Pacific region over the next 3
years, with amounts of JPY5m or less. Not sure what a
company can actually do with just JPY5m... but at least as
an incubator they offer facilities. They've also said
publicly that they will invest in 1,000 companies over 10
years, which would certainly rival Y Combinator.

Open Network Lab
Founded by Digital Garage (previously invested in Twitter
and Linkedin.com), Netprice.com, and Kakaku.com. ONL is the
closest thing in Japan to Y Combinator as an accelerator,
and offers funding of JPY1m for companies to base
themselves at the ONL offices for 3 months. ONL takes 5%
for the investment. Just like Y Combinator, companies are
expected to pitch to angel investors and VCs in order to
"graduate" and many of these pitches are to Singaporean and
US investors.

Netage
Founded by Kiyoshi Nishikawa, an old hand at venture
investing who has had some hits in the past, including
Japan's largest SNS, Mixi, and gaming company Gree. Recently
Netage is doing micro investments of about JPY3m into web
start-ups that have the potential to go international. No
doubt they put this emphasis on things partly because of
the failure of Mixi to internationalize and thus compete
with Facebook (both companies started in the same year). So
far Netage has done 11 investments on the new program and
expects to do 50 eventually.

Start-up Base Camp
In February, online ad company Cyberagent started up
Japan's largest incubator, consisting of 1,200 sq. m. of
office space for up to 200 workspaces. The incubator will
initially draw tenants from its sister fund, CyberAgent
Ventures, which has JPY500m invested in 150+ firms. CAV
says it will increase the seed fund to around JPY2bn.

Samurai Incubate
Probably one of the most successful incubator/accelerators
in Japan in our opinion is Samurai Incubate, which
epitomizes the low-funds, hot-house incubation ethic. The
company has had dozens of companies pass through its doors,
and newcomers are put through a pressure-cooker course for
a year. They then get to present at TiE events in Tokyo,
with the best ones going through to the TiE50 event in the
USA. Samurai Incubate has created a school and even an
accounting company for venture firms, trying to plug all
the professional holes that most new firms suffer from.

The above is by no means an exhaustive list and there are
many more incubators in Japan -- such as Jeff Char's
well-respected J-Seed Ventures which is launching its
Venture Generation incubator this month. In fact, in the
ten years between 2000 and 2010, the number of incubators
in Japan leaped from around 30 to more than 330 -- the
fastest rate of growth amongst Asian nations.
Unfortunately, most of the incubators are run by government
types who lack practical business experience and tend to
rely on text books to educate their charges. So it's not
clear whether many of these incubators have really been
doing their job or not, although they make for great ad
copy when first established. There is also the little
matter of some of these operators spending most of their
budget on a fancy building and keeping none in reserve
to actually spend on the tenants...

Which is why the appearance of Y Combinator type
investors/incubators is so interesting. Still, out of the
336 incubators registered in 2010, 41 of them were private
organizations, and thus there is hope that things are
changing and that companies being hatched by Movida and
others will be stronger and more commercially viable.

If you'd like to learn more about the incubation sector in
Japan, there is a very good paper that was put out by a
Stanford University researcher, Kathryn Ibata, in
November 2011, called "Policy and Practice in Japan's New
Business Incubation Revolution" that is worth reading.
Although the paper doesn't specifically cover the Y
Combinator style funds/incubators we have mentioned here,
it does a good job of explaining the background to the
recent surge in the number of incubators operating in
Japan and why bureaucrats have been able to infiltrate 70%
of them.

While on the topic of incubators, if there was ever a
crying need for a specialist incubator, it is for one that
educates and assists foreign SMEs how to get into the Japan
market. We'd start in the consumer products sector, most
likely with food. A good model would be the Blue Ridge
Food Ventures operation in North Carolina in the USA. This
11,000 sq. ft. facility provides start-ups with a
shared-use kitchen, natural products manufacturing
facility, professional support to navigate regulatory
issues for food and dietary supplements production, as well
as advice on packaging, label design, etc. If there is
anyone from JETRO reading, please take note...

...The information janitors/

***------------------------****-------------------------***

-------------------- Delta Air Lines ----------------------

WE HAVE RESERVED A LINE ONLY FOR YOU

Flying on Delta Sky Priority means you always come first,
whether you're at the airport, boarding the plane or
leaving baggage claim. Experience this elite service with
your SkyMiles Gold Medallion status (and above), as a
SkyTeam Elite Plus member, and when you travel in
BusinessElite or First Class.

A poll conducted by the Asahi newspaper has found that 57%
of the people surveyed oppose a restart of the 52 nuclear
power plants currently shut down for servicing and other
reasons. Given that the government is indicating that it
expects a number of plants to be cleared for operation in
time for the summer peak caused by air conditioner users,
this poll could throw a spanner in the works. ***Ed: On the
other hand, what an amazing opportunity to kick-start the
alternative energy sector and free Japan over the next 10
years from foreign energy supply disruptions. OK, you'd
need a lot of solar farms to achieve that, but we're in a
country that has the capacity to produce this type of
volume, if the desire was great enough.** (Source: TT
commentary from reuters.com, Mar 13, 2012)

Chemicals company, Asahi Kasei, has said that it will buy
Zoll Medical of the USA for US$2.2bn. Zoll makes Lifevest
defibrillators and other medical devices. The price being
paid is a 24% premium over the firm's closing share price
the previous day, and represents a pretty high premium for
Zoll's overall US$523m in sales last fiscal year. The
Lifevest product accounts for about US$111m of this. The
deal is expected to close in June, subject to anti-trust
approval.** (Source: TT commentary from boston.com, Mar
12, 2012)

An interesting and somewhat confusing battle between two
"grey zone" financial titans in the gambling business is
emerging in a court house in Las Vegas. Aruze billionaire,
Kazuo Okada, is suing Wynn Resorts Chairman Steve Wynn to
have a 20% stake held by Okada in Wynn Resorts restored.
Okada's stake was forcefully sold off at an US$800m loss
after Wynn claimed allegedly illegal payoffs in the
Philippines by Okada's firm triggered a shares redemption
clause in the shareholder agreement between the two
parties. ***Ed: What's going to be interesting is just how
much these two guys will reveal about each other's murky
dealings over the years. We're sure that the tax office
and other authorities will be equally interested.**
(Source: TT commentary from bloomberg.com, Mar 14, 2012)

Reflecting a desire to create diversity of locations --
particularly in the wake of the Tohoku earthquake last
year, Yahoo Japan has announced that it will expand its
data center capacity in Kitakyushu, from the current three
to five buildings. The fifth building will be the largest
in the complex, at 5,800 sq. m. of floor space and capable
of housing around 16,000 servers. ***Ed: Kitakyushu is
geologically one of the more stable major cities in Japan,
and we expect to see a few more companies select that
location in the future.** (Source: TT commentary from
e.nikkei.com, Mar 14, 2012)

Mixi must be watching nervously at the phenomenal expansion
of Facebook in Japan. Facebook Inc., announced on Friday
that it added another 5m users in just 6 months in Japan,
to now total 10m users -- 2/3 of what Mixi has (15.2m).
Facebook is just starting to ramp up its operation in
Japan, and says it will start hiring significant numbers of
staff to push its business forward in Japan. ***Ed: As we
imply in our editorial this issue, one of the issues for
Japanese start-ups is their inward focus and inability to
internationalize, as is the case with Mixi. While Mixi has
done well to carve out leadership in Japan in the SNS
space, it has allowed Facebook in the same period of time
to go unchallenged elsewhere in the world. We predict that
Mixi will be sold or forced into a merger within five years
as a result.** (Source: TT commentary from e.nikkei.com,
Mar 16, 2012)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.

***------------------------****-------------------------***

----------------- Sumikawa Law Office ---------------------

Solving legal problems in Japan is a tough work. You may
not only be stressed by the trouble itself, you might
encounter difficulties with language, legal procedures,
etc. Therefore, if you are involved in any of the legal
issues listed below, call us. We can help.

=> BiOS, a Division of the LINC Media group, is actively
marketing the following positions for customers setting up
or expanding in Japan, as well as other employers of
bilinguals.

** HIGHLIGHTED POSITION

BiOS is urgently looking for a Helpdesk Technician with
experience supporting end-users in the APAC area. The
work place will be at our client’s office in the Chiyoda-ku
area. The candidate will be responsible for identifying and
resolving level-one issues and incidents for end-users
regarding PCs, the network, printers, servers, etc., as
well as administering mobile devices using the corporate
mobile server, and/or Exchange ActiveSync technology. You
will also be responsible for coordinating with local
vendors at branches in APAC area for IT equipment asset
management.

Due to the technical nature and demanding work environment,
this position is suitable for someone with solid experience
of at least two years as a user support or desktop support
engineer, preferably in a multinational environment. In
addition, since this role requires coordination with end
users and internal IT team in both English and Japanese, wo
fluent English and Japanese will be required.

Every 2 weeks BiOS sends out a regular communication to its
job seeking candidates, called BiOS Job Mail. Every edition
carries a list of BiOS's current and most up-to-date
vacancies, with each entry featuring a short job
description and a direct link to the main entry on the BiOS
home page. Regardless of whether you are unemployed and
searching, thinking about a career change, or just curious
to know if there is something out there that might suit you
better, the BiOS Job Mail newsletter is an easy and
convenient way for you to stay informed. If you would like
to register for the BiOS Job Mail, or to find out more,
please email tomohiro.kimura@biosjp.com.

Statistics show that roughly 80% of companies listed on the
Tokyo Stock Exchange have implemented or plan to set up
shared services initiatives over the next 12-24 months.

Responding to overwhelming feedback from the first annual
event, we are delighted to announce that the second annual
Shared Services, Outsourcing and Offshoring Summit JAPAN
has now been scheduled for July 19-20 in Tokyo.
(Please note that this event features dual language
translation in English & Japanese).

If you can write 350 words and take 3-5 correctly exposed
photos, then you should try your hand as a writer for Japan
Tourist, Metropolis' fast-growing Japan travel megasite.

www.japantourist.jp is in fact the fastest growing English-
language travel site in Japan, and it's getting that way
because more than 200 people have signed up to contribute.

Japantourist.jp is offering 10 Delta airline tickets,
800+ Solare hotel rooms all across the country, Adidas
apparel, and many other redeemable goods and services to
anyone writing for the site. So long as it is in Japan,
anywhere, past or present, is welcome.

www.japantourist.jp for more information.
-----------------------------------------------------------

***------------------------****-------------------------***

+++ CORRECTIONS/FEEDBACK

In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to editors@terrie.com.

*** In TT653 we outlined new regulations coming up in June
which will affect the residency procedures for all
foreigners living in Japan. We received a lot of email on
this one, and the most complete response is the following
(thanks, Meg).

Thank you for posting the information from Steve Burson. He
gave links to Immigration Bureau sources, whereas I found
the MIC (Ministry of Internal Affairs & Communications
materials, distributed at local municipal offices, easier
reading (attached, also):

There are interesting differences in the different
Ministry "takes". The MoJ booklet is 16 pages and not
particularly user-friendly; the MIC pamphlet is a 6-pager
and announces the “Resident Registration System”, not the
MoJ "Residency Management System".

I focused on the MIC pamphlet, simply because MIC are the
people in charge of your local government offices where
you currently get your Alien Registration Card (ARC).

Of the various changes, one is that now foreigners are
required to report within 14 days and "Moving-Out" notices
need to be given as well as "Moving-In" notices. The
current system gives 90 days to report a new residence,
and there is no moving-out notice required.

The MIC advises that when you submit a "moving-in notice"
at your local government office, if your head of household
is foreign, you need to submit official documents to prove
your relationship to them (marriage certificate, etc.) If
these documents are in a foreign language, you must also
provide a Japanese translation. (This Japanese-language
requirement is new; current visa application documentation
for the MoJ is allowed to be submitted in English, and no
proof is requested at the ward office.)

Transition Period: At the Tokyo Regional Immigration Bureau
office, on the second floor, there are forms are available
NOW for applying for the new Residence Card, which you will
be able to pick up at the Regional Immigration between late
July/mid-August -- according to the official at the
transition desk. The officer on duty said that it would be
a 2-visit process… but was not completely certain on many
details..

Changes in Data Displayed: The MoJ Booklet has a mock-up of
the "Zairyu Card", officially a "Residence Card" in
English. Listed are name, date of birth, sex,
nationality/region, address (residence in Japan), visa
status, (in Japanese: limitations on employment), period of
stay, date of expiration (in Japanese: type of permits,
date of permit, date of card issue), and expiration date
for the card. On the reverse, there is a list of your
residential addresses, dates reported, stamp of
authorities (in Japanese: permission to engage in
activities other than those on the visa, for example
part-time work up to 28 hours, notes of any pending
applications). Signature and employer details have been
left off.

Currently, permission for part-time work must be applied
for separately, and does not appear on the ARC. Apparently
at some points of entry, it will be possible for students
(and dependents) to receive permission stamps on the card
for part-time work, but this will be only for new cards
issued on new visas.

The chart in the MIC booklet makes it clear that this new
system will plug the resident into the National Health
Insurance, National Pension Plan, and Nursing Care
Insurance, with changes-of-address noted, and full
movement of information back and forth with the Regional
Immigration Bureau. The full effect of this on expat
enrollment in these social welfare systems, which are
income-level based, is yet to be known. There was a
previous attempt to require enrollment in these systems,
but which was placed in abeyance due to strong opposition
from the foreign community. That abeyance may come to an
end with the new system. "Watch this space"...

For the "Jumin-hyo" resident records, apparently the local
government offices will issue provisional resident records,
and notify residents sometime in May 2012. The local
government will notify you, and if you have an ARC, there
will be no need to fill out any extra paperwork. However,
IF FOR ANY REASON you are not issued a Resident Record on
the day the law comes into effect, you must report your
name and address to your local government within 14 days
and apply for a Resident Record, just to check.

J@pan Inc is Japan's only independently published English-
language business website. Authoritatively chronicling
online the business trends in Japan, each posting brings
you in-depth analysis of business, people and technology in
the world's second largest economy.

Visit www.japaninc.com for the best business insight on
Japan available.
-----------------------------------------------------------